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Category: Law, Society & Culture

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  • Doing it Tough

    Inequality, Unions & Collective Bargaining, Wages & Entitlements

    Doing it Tough

    How Australians are experiencing the cost of living crisis
    by Lisa Heap

    Author

    Lisa Heap

    Senior Researcher

    This report documents the results of a recent survey of Australian adults regarding their experience of the cost of living crisis. Australian workers are doing it tough. Costs are increasing faster than wages and incomes. Those with less are doing it the toughest.

    The current cost of living crisis in Australia has two components – the incomes that people receive, and the prices they pay for goods and services. This is what Alan Fels has recently referred to as the “two faces” of the crisis .  Action to protect the living standards of Australians must address both faces of the crisis.

    As part of a broader research initiative investigating the human costs of the crisis and the impact of austerity on Australian workers, the Australia Institute’s Centre for Future Work surveyed a nationally representative sample of 1014 adults living in Australia about their household income and the costs of living.  The results show that:

    • Almost three-quarters (72%) of respondents felt their wages had grown slower than prices over the previous year.
    • Over half of respondents (53%) said their household’s financial situation was worse that it was two years ago.
    • The cost of living crisis has had differential impacts. Because it has affected lower-income Australians most severely, the cost of living crisis has exacerbated inequality.
    • Respondents identified higher grocery prices as the most visible source of the increased cost of living. Six out of 10 (60%) of respondents identified groceries as the purchase where they have most noticed higher prices followed by utilities (21%) and transport (7%).
    • There was strong support for measures across a broad range of policy areas to address the costs of living. 64% of respondents said it was very important to lower utility costs to reduce cost of living pressures. 64% said it was very important to increase supermarket competition, 60% to lower medical costs, and 58% to increase the pace of wages growth.

    The respondents to this survey supported a suite of policy initiatives designed to both reduce the cost of living, and to increase wages and income supports. In their view, addressing the cost of living crisis requires a multi-dimensional approach, rather than a singular reliance on high interest rates to slow inflation.

    The report is published by the Centre for Future Work in conjunction with a one-day symposium it is hosting in Melbourne on 17 October on the crisis in living standards in Australia, and how to address it through greater investments in wages, public services, and affordable housing and energy.



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  • Leaving Money on the Table: Foregone Economic Gains from Continued SRS Underfunding

    Education & Training, Public Sector, Procurement & Privatisation

    Leaving Money on the Table: Foregone Economic Gains from Continued SRS Underfunding

    By locking in public school underfunding, Australia misses out on important economic, labour market, and fiscal benefits.
    by Jim Stanford

    Author

    Jim Stanford

    The Commonwealth government’s current offer to fund public schools to just 22.5% of the agreed Schooling Resource Standard would leave much of the current school funding shortfall unrepaired. This would squander many of the economic benefits that would otherwise result from full public school funding. Based on disaggregation of previous estimates of the economic benefits generated by stronger school funding and hence scholastic outcomes, we estimate the failure to fulfil the 25% Commonwealth contribution required for full SRS funding would ultimately forego GDP gains of $3.5 to $5 billion per year, and impose net fiscal costs on government (all levels) of $0.6 to $1.5 billion per year.

    International and Australian research has confirmed the substantial economic and fiscal benefits of well-funded and accessible public schools. Extrapolating international evidence, previous research from the Centre for Future Work estimated cumulating Australian GDP gains reaching $18-$25 billion per year after two decades, as a result of fully meeting SRS funding standards for public schools. Those gains are experienced via increased employment and value-added in the school sector; improved productivity and wage outcomes for school graduates; and reduced income support and social expenditures as a result of better overall education. Higher GDP would in turn generate revenue gains for government that exceed the expense of meeting SRS funding benchmarks in the first place.

    The failure to fully fund public schools is clearly a case of false economy. The relatively small amounts of money ‘saved’ in the near term, are more than offset by long-run underperformance according to numerous indicators: school attainment and completion, productivity, GDP, and fiscal balances. The Commonwealth government is leaving money on the table, with its failure to fully meet SRS funding requirements.



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  • The 9 to 5 is back! Time to put the phone on silent

    The 9 to 5 is back! Time to put the phone on silent

    by Fiona Macdonald in The Sydney Morning Herald and The Age

    Fiona Macdonald

    Acting Director, Centre for Future Work

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    Originally published in The Sydney Morning Herald and The Age on August 26, 2024

    If you’ve ever flicked off an email before bed, texted your boss out of hours, or received an ‘urgent’ work call after clocking off, you’ll be glad to hear some respite is just around the corner.
    A new right to disconnect from work, for employees in businesses with 15 or more staff, comes into force across Australia from Monday 26th August. This is a welcome response to the growing problem of ‘availability creep’, where work demands spill over into workers’ leisure time.
    The new right means most employees can now refuse to monitor and respond to unreasonable contact from their employers about work matters outside of paid work hours.
    Many of us are now online and digitally connected to our workplaces 24/7. This constant connectedness can make it hard to escape work calls, texts, and emails when not actually at work.
    As we are now so easily contacted anywhere and anytime, our leisure and family time has become very susceptible to interruptions from work, leading to unpaid overtime, an inability to ‘switch off’, and blurred boundaries between work and non-work time. Gone are the days of 8 hours work, 8 hours rest, and 8 hours play.
    The consequences are stark. Research has shown these work practices lead to increased stress, health problems and a poor work-life balance.
    The right to disconnect from work is one solution to the problems of availability creep and unpaid overtime. The Senate Select Committee on Work and Care proposed this reform to Australia’s workplace laws in early 2023 and the initiative was included in the Government’s Closing Loopholes package of workplace reforms passed by the federal parliament later that year. A similar right is in place in a number of other countries including France, Canada and the Philippines.
    Australia’s new right to disconnect does not mean there is a blanket ban on contacting employees outside their scheduled work hours. Rather, it means that an employee cannot be penalised for refusing unreasonable contact.
    There are many circumstances in which a manager’s attempts to contact an employee out of their work hours might be reasonable. For example, this could be where an employee is on-call and receiving an on-call allowance. Some jobs regularly require a certain amount of out of hours contact and employees’ remuneration may reflect this. However, for many workers, contact out of working hours arises from pressures that lead to overwork and unpaid overtime.
    And unpaid overtime is a significant problem in Australia.
    In 2023 employees responding to a Centre for Future Work survey reported working an average of 5.4 hours of unpaid overtime a week, with full-time employees reporting working an average of 6.2 hours a week of unpaid overtime. A conservative back-of-the-envelope calculation shows that’s an extra seven weeks’ work every year.
    Workers should not have to monitor or respond to emails, text messages and phone calls after hours about concerns that could be raised and dealt with in their scheduled work time. Poor organisation, understaffing and reliance on overwork are not good reasons for requiring employees to be available out of hours. It is these practices that the right to disconnect is intended to challenge.
    Fears that workplace flexibility will be undermined as workers exercise their rights to disconnect are largely misplaced. In organisations where flexibility is based on employees’ constant availability there may be some disruption. But this is exactly the practices that the right to disconnect should disrupt.
    Flexibility can exist alongside respect for employees’ rights to switch off from work. Good flexible work practices and arrangements are those that benefit both employers and employees, and are designed through negotiation and consultation. The dissolution of boundaries between work and leisure time is not the answer.
    Will individual employees be lining up to ask the Fair Work Commission to order their employers to stop contacting them? Probably not. The real potential in the right to disconnect is its ability to catalyse an evolution in workplace expectations that shifts norms away from a reliance on overwork and constant availability.
    Time to put that phone on silent.


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  • Closing Loopholes Protections, Including Right to Disconnect, Come Into Effect 26 August

    Closing Loopholes Protections, Including Right to Disconnect, Come Into Effect 26 August

    by Melissa Donnelly

    Melissa Donnelly

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    New labour rights coming into effect on 26 August, including the ‘Right to Disconnect’.

    On Monday, 26 August, several legal and regulatory changes included in the Closing Loopholes Act (passed earlier this year by Parliament) will come into effect. These changes will better protect casual employees, with a new legal definition of what constitutes casual employment (rather than leaving it solely to employers), and better pathways for casual workers to obtain permanent employment. New protections for ‘employee-like’ workers in the road transport and platform economy (including food delivery riders and ride-share drivers) will also come into effect.

    One of the most exciting changes coming on 26 August is enactment of the new ‘Right to Disconnect’ for workers at large firms. (For smaller workplaces, these changes come into effect next year.) This marks an important step forward in workers’ ability to turn off their devices outside of normal work hours, and get full value from their leisure time.

    The importance of these protections, and some detail on how workers can make the most of them, are provided in this commentary article by Melissa Donnelly, National Secretary of the Community and Public Service Union. The commentary originally appeared in the Canberra Times. Ms Donnelly refers to research from the Centre for Future Work’s annual Go Home On Time Day survey; see our full 2023 report on unpaid overtime for full details on those findings.

    Right to Disconnect Means Countless Aussies are About to Reclaim Knock-Off Time

    By Melissa Donnelly

    Everything that is treasured by Australians gets a nickname and finishing work at the end of the day is no different.

    But I’d argue that knock-off time is more than treasured. It’s sacred.

    Workers will soon have the right to disconnect and not answer calls or emails outside of paid hours as parliament passes Labor’s bill endorsing the reform.

    For some, knock-off time leads to a frantic trip to pick up the kids from school and then piling over to the neighbours’ place to watch the footy.

    For others, it means a visit to the local gym, a game of social soccer, or dinner and drinks with friends.

    But as time has passed and technology has improved, we’ve become increasingly available.

    The iconic Nokia 3310 was released in 2000, but it wasn’t pinging at us every time we got an email or meeting invite.

    It was only used for texts, calls and, of course, snake.

    Fast forward to 2024 and things are little bit different.

    For many, our now very smart phones are ringing or sending us email notifications and texts more often than they aren’t.

    Things that could wait until you got to the office are being done while you eat breakfast, and that call that definitely could have been an email is being answered late into the night because you’re committed to your job and don’t want to ignore your boss.

    But it’s not sustainable.

    We’ve slowly but surely lost our sacred knock-off time, and in its place is “I’m heading off, but available on my mobile”, or “I’ll jump back online when I’m home to finish that thing off”.

    I don’t know that knock-off time really exists anymore, but I do know that we’re all the worse for it.

    The union movement has always fought to protect workers while they are at work.

    Basically, you now have the right to knock off at the end of day. Properly.

    But just as important, has been the long and consistent fight the union movement has had with businesses and governments to protect the right of workers to not be at work.

    Weekends, lunch breaks, annual leave, sick leave and parental have all been fought for and secured by the union movement.

    So, what do you do when your time away from work is increasingly compromised by the explosion of technology?

    You campaign for and secure the right for workers to disconnect.

    And that’s exactly what we’ve done.

    What does this mean in practice?

    It means that you’ve got a whole bunch of extra rights when it comes to being contacted after-hours or being asked to monitor emails or anything work related, outside of work hours.

    If an employer is contacting you outside of your working hours, there must be a good reason for it.

    The Fair Work Act provides a good outline to help determine if contact is reasonable or not. These include:

    The reason for the contact – is it an emergency or highly time sensitive?

    The method of contact and the level of disruption it causes (for example, an email is less disruptive than an SMS or phone call).

    Whether the employee is paid to be available or is paid for additional hours worked.

    The nature of the role and the level of responsibility held by the employee.

    The employee’s personal circumstances (including family or caring responsibilities).

    This law supports you to switch off and will make your boss think twice about contacting you.

    Basically, you now have the right to knock off at the end of day. Properly.

    You aren’t paid to be available 24/7 – so you shouldn’t be.

    You should be able to watch your child at footy training – uninterrupted.

    You should be able to go to a pottery class – uninterrupted.

    You should be able to go fishing, visit a loved one, make book week costumes (parents, head to toe in glitter and makeshift costumes will know it’s *this week*), play soccer, have a beer, go to a dance recital, plod around in your garden, read a book, bake a cake – uninterrupted.

    You might be asking yourself right now, how big of a problem is this?

    The Centre for Future Work at The Australia Institute publishes an annual report that shines a light on the amount of unpaid overtime that Australian workers are doing.

    The 2023 report found that on average, employees perform 5.4 hours of unpaid work per week, with full-time employees working about 6.2 unpaid hours per week. This equates to more than 280 additional hours per year, or about 7 weeks per year, per worker.

    Workers shouldn’t be working an extra 7 weeks for free every year.

    You’re meant to knock off on time, and you’re meant to be able to switch off at the end of the day because it is good for you. It is good for your mental health, it is good for your physical health, it is good for your relationships.

    Just because we can be available all the time, doesn’t mean we should be.

    My final comments are ones you’d expect from a union leader. I want to highlight that the rights you have as a worker aren’t really your rights unless they are enforced. And that goes for all rights – your right to flexible work, your right to a safe workplace and now, your right to disconnect.

    If you’re not sure how to access these rights and you’re a member of the CPSU, reach out to our Member Service Centre. If you’re an APS employee but not yet a member, it’s time to join.

    The right to knock off at the end of the day is back, and I encourage you to use it.

    Melissa Donnelly is the national secretary of the Community and Public Sector Union.


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  • Solid Foundations, Bright Future

    Education & Training, Industry & Sector Policies, Tax, Spending & the Budget, Wages & Entitlements

    Solid Foundations, Bright Future

    An Analysis of New South Wales Economic and Fiscal Advantages
    by Jack Thrower

    Author

    Jack Thrower

    Senior Economist

    New South Wales has one of the most prosperous and productive economies in Australia, with a diverse base of economic activity and strong labour market. However, years of austerity have hollowed out its public sector, creating one of the proportionally smallest state public sectors in the country in terms of both economic activity and employment.

    Despite the instrumental role the public sector played in navigating the state through the pandemic, weak wage growth and rising inflation have compounded the impacts of austerity, leading to significant reductions in public sector real wages. While the current government’s scrapping of the wage cap and implementation of public sector wage rises has undone some of this damage, most notably the October 2023 wage rises for public school teachers, more repair is needed.

    The NSW government has a strong fiscal position with which to manage these challenges. NSW maintains nearly the highest credit rating in the country and relies on revenue bases that are both diverse and stable. Additionally, there is considerable evidence that, if needed, several options are available to increase state government revenue. As the state economy weakens in response to high interest rates and declining real incomes, the state government has the responsibility to contribute to support the economy and broader society, through expansion of public services, repair of public sector wages, and support for the most vulnerable.



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  • Submission to the House of Representatives Standing Committee on Employment, Education and Training Inquiry into the Digital Transformation of Workplaces

    Digital Technology & the Internet, Future of Work, Labour Standards & Workers’ Rights

    Submission to the House of Representatives Standing Committee on Employment, Education and Training Inquiry into the Digital Transformation of Workplaces

    by Fiona Macdonald and Lisa Heap

    Authors

    Fiona Macdonald

    Acting Director, Centre for Future Work

    Lisa Heap

    Senior Researcher

    Artificial Intelligence (AI) is transforming the way we work and the jobs we do. AI innovations in workplaces can have positive benefits, including through productivity gains. However, AI applications can also have significant risks for workers and for job quality.
    AI applications, including automated decision making, are not neutral processes. Software can be designed and used to assist workers by augmenting their capacity and freeing up time for more meaningful or creative work. Or it can be designed and used in ways that intensify work and displace workers.
    International evidence shows the use of AI in workplaces for managing workers and work processes is extending and intensifying long-standing efficiency-driven logics that result in reduced autonomy and control and intensify work, undermining job quality and worker wellbeing. Even when designed for benevolent purposes, unintended consequences can arise from the adoption of AI in workplaces. These include serious breaches of privacy, bias and discrimination in recruitment and hiring, and unfair decision-making in performance measurement and evaluation.
    In this submission we argue that the promotion of AI innovation must not overshadow objectives and principles for decent jobs and fairness at work. We set out principles for new laws to regulate the uses of AI in workplaces with a goal of protecting workers.



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  • Webinar: Stop passing the buck -Workers’ compensation and ‘gig’ workers

    Webinar: Stop passing the buck -Workers’ compensation and ‘gig’ workers

    by Lisa Heap

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    Workers’ compensation and rehabilitation are amongst the most important legal issues facing the ‘gig’ economy. This reflects the potential vulnerability of these workers and their families, co-workers, and community to harsh and long term consequences from injuries. For a while, it looked like federal industrial policy might ‘solve’ the workers compensation problem by redefining ‘gig’/platform workers as employees.

    However, the policy decision to enshrine minimum rights for a separate ‘employee-like’ category of workers leaves gig workers outside the scope of workers compensation protections.

    In this discussion we will hear from those researching and advising on the reforms necessary to better protect injured gig workers, a worker who has been seriously injured, and those who are organising and advocating for policy and law reform.

    Free Event – Register Now

    Speakers:

    • Michael Kaine – National Secretary Transport Workers’ Union
    • Professor Emeritus David Peetz – Carmichael Centre’s Laurie Carmichael Distinguished Research Fellow.

    When:
    Thursday, July 18, 2024 at 12:30 pm AEST

    Where:
    Zoom


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    Dutton’s nuclear push will cost renewable jobs

    by Charlie Joyce

    Dutton’s nuclear push will cost renewable jobs As Australia’s federal election campaign has finally begun, opposition leader Peter Dutton’s proposal to spend hundreds of billions in public money to build seven nuclear power plants across the country has been carefully scrutinized. The technological unfeasibility, staggering cost, and scant detail of the Coalition’s nuclear proposal have

  • Does leave for menstruation and menopause advance women’s rights and gender equality at work?

    Does leave for menstruation and menopause advance women’s rights and gender equality at work?

    by Lisa Heap

    Lisa Heap

    Senior Researcher

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    As pressure grows for action to establish new work rights, including additional leave, for those who experience menstruation and menopause, the Centre for Future Work’s Senior Researcher, Lisa Heap, canvases the debate about whether these rights will advance gender equality at work.

    There are growing calls for the establishment of new work rights, including additional leave, for those who experience menstruation and menopause*. These biological processes are normal and are experienced by large numbers of workers. Yet their sometimes debilitating effects have been ignored in the framework of workplace rights historically built around men’s experience of life and work.

    Unions have begun surveying their members on the issue and a growing number of unions are seeking new rights in collective agreements, including additional leave, for menstruation, menopause, and reproductive health concerns. The ACTU, Australia’s peak union body, is likely to discuss a policy on reproductive leave (including leave for menopause and menstruation) at its Congress in June 2024. There is also evidence that organisations are moving to include policies on these issues in their HR handbooks. These calls for new rights reflect increasing public awareness and acceptance that biological processes experienced by women should come out of the shadows and from behind closed bathroom doors.

    However, not everyone agrees that seeking additional leave and other workplace rights because of menstruation or menopause is the right way to go. Leading industrial relations academic Marian Baird, whilst being a strong advocate for new rights, has noted that debate on issues such as menstrual leave ‘can be polarising for organisations and for feminists.’ Concerns include that leave and other rights for menstruation and menopause may result in women being targeted as weak or unable to do the job because they are absent from work or that employers will see them as less reliable or more costly to employ. Thus, undermining women’s position at work. Some scholars argue that focusing on leave, and therefore effectively removing the problem from the workplace, means that the problem is being hidden at work.

    There have been long standing debates between feminist theorists about whether the path to gender equality at work is best served by highlighting the similarities between men and women and treating all workers the same – sometimes referred to a formal equality. Or whether there should be accommodation of differences including acknowledging biological differences and the reproductive role that women play in society and ensuring that work rights reflect this. The difficulty we have in Australia, like in many western democratic countries, is the standard of the ideal worker is male so treating everyone the same, effectively means treating them as men.

    It is difficult to ignore that some workers are struggling with the impacts of menstruation and menopause at work. Supports are needed for these workers. Not everyone’s experience is the same but for some menstruation involves severe bleeding, extreme pain, and lethargy. Shame and stigma for some workers may lead to hiding period pain and carrying on with job. This can have both physical and psychological impacts. The effects of the processes associated with menopause may include losses of concentration, difficulty sleeping, headache, fatigue and mood changes. In both cases work based impacts can include perceptions of poor work performance, a loss of confidence for effected workers and using all personal/carers’ leave trying to ‘manage’ the impact of menstruation and menopause. Some workers may need a move to part-time work or even consider leaving paid work as a way of managing.

    The evidence gathered around the work-based impacts of menstruation and menopause establishes the need for further changes in work rights to accommodate the lived experience of women. To ignore this evidence would in effect reinforce men’s experience of work as the norm and the standard around which work rights are framed. Australian public policy and legal frameworks have developed to accommodate some biological processes experienced by women. For example, there are now universal rights around pregnancy, maternity, and breastfeeding and work. Leave and workplace flexibilities accommodating the effects of menstruation and menopause could be the next step in the evolution of these workplace rights.

    Beyond HR policies there are two main ways of establishing work rights – incorporating these rights in workplace laws or bargaining for their inclusion in enterprise agreements. Incorporating leave and other rights to flexible work arrangements in legislation would provide a universal standard and a whole of society approach. Bargaining offers the opportunity to craft boutique solutions considering the needs of the organisation and those of the workforce. The process of bargaining itself helps to educate and explore the issue thus assisting with ‘normalising’ it at work. However, bargaining for ‘equality rights’ of this kind can take time and often requires work-based champions to get and keep the issue on the bargaining agenda.

    In Australia many universal workplace rights have been achieved first through unions bargaining for these at the industry or organisational level and then by unions fighting to have these included in legislation. The achievement of paid leave for those workers experiencing family violence is the most recently high-profile example of this. The progress to gain menstrual and menopause leave, and other associated rights is likely to involve both bargaining for these rights and lobbying for legislative change.

    Leave for menstruation and menopause will advance women’s rights and gender equality at work however, even when these rights exist that won’t be the end of action to make them a reality. Workers will need to be aware of these rights and feel comfortable and confident to use them without fear that they will be treated less favourably for doing so. Establishing the rights either through legislation or bargaining will set the normative standard. Organisations will then have the obligation to create systems processes and cultures that would ensure that workers can, and do, access these rights once they exist.

    *I use the term woman/en to include those who experience menstruation or menopause but who may not identify as a woman.

    **This article originally appeared in The Point the official newspaper of the Independent Education Union Victoria Tasmania


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  • Who’s hurting most from rising interest rates? It’s probably you.

    Who’s hurting most from rising interest rates? It’s probably you.

    by Greg Jericho

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    Soaring house prices, high household debt and the pervasiveness of variable rate home loans mean that Australians bear the brunt of interest rate rises, says Greg Jericho.

    A new report by International Monetary Fund (IMF) shows rising interest rates bite harder in some countries than others – and it’s grim reading for Australian mortgage holders.

    Globally, repayments have become increasingly difficult to meet on the back of rapid rate increases.

    But the new IMF World Economic Outlook report shows that rate rises hurt Australians the most.

    “It mightn’t come us a surprise too many Australians, but we are right at the top – we’re number one,” Australia Institute Chief Economist Greg Jericho said on the latest episode of Dollars & Sense.

    “What it’s saying is that, if interest rates went up – let’s say by one per cent in every advanced economy in the world – Australians would feel that the most.”

    The prevalence of variable home loans in Australia is one of the reasons rate increases are hitting harder, according to the IMF.

    “In Australia, around 85 per cent of people with a mortgage have a variable rate of some kind. That’s actually really unusual,” Jericho said.

    “In the United States, 95 per cent of people with a home loan have a fixed rate mortgage. In the United Kingdom, it’s 85 per cent.

    “If you’ve got a 30-year fixed rate mortgage, you really don’t care what the Reserve Bank does.”

    Other drivers identified by the IMF include high levels of household debt and looser lending guidelines, but Jericho said that soaring house prices also play a big role.

    Since 2005, median house prices have gone up by 86 per cent globally, but Jericho’s analysis shows that prices have gone up 162 per cent in Australia over the same period.

    “So, just a little bit different.

    “I think you can make a pretty good case…that we have some damned expensive houses.

    “Things have really taken a turn for the worse over the past five, 10, 15 years – nearly 20 years really.”

    As for what the Reserve Bank of Australia might do from here, the market is predicting cuts over the next 12 months, but that might be optimistic, according to Jericho.

    “If Australians are hurt more by interest rate rises than elsewhere, it means they also get the benefit of rate cuts more than elsewhere.

    “So the Reserve Bank might be inclined to go, ‘yeah, let’s just wait and see’.”

    Dollars & Sense is available on Apple Podcasts, Google Podcasts, Spotify or wherever you get your podcasts.


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  • Australia’s “stupid” surplus obsession must end

    Australia’s “stupid” surplus obsession must end

    by Greg Jericho

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    A budget surplus doesn’t mean a government is good at running the economy – we should focus on the choices they make instead, says Greg Jericho.

    Australian governments like to brag about their big budget surpluses — one even slapped it on a mug — but they aren’t all they’re cracked up to be, according to Chief Economist at the Australia Institute, Greg Jericho.

    “I think the discussion about budget surpluses and deficits is quite stupid, to be blunt,” he said on the latest episode of Dollars & Sense.

    The accuracy of budget projections is highly dependent on commodity prices, international economic conditions and other factors outside a government’s control, making them notoriously difficult to get right.

    “It’s a fairly complicated thing, the Australian economy. There are lots of moving parts and they never get it right,” Jericho said.

    “Last year, in the May budget, there were essentially two months to go in the 2022-23 financial year, so you’d think they can’t get the figure that wrong. Treasury estimated that the budget was going to be in surplus by $4 billion.

    “When we got complete figures in September…they found out, no — it wasn’t $4 billion, it was $22 billion!

    “If they can be that wrong with two months to go, think how wrong they can be 12 months ahead, four years ahead.”

    Jericho said it’s “absurd” to suggest a surplus or deficit alone reveals if a government is managing the economy effectively.

    “It started with Paul Keating and then Peter Costello really set fire to it because he was Treasurer during a massive mining boom, where there were masses of tax revenue coming in, making it very easy to be in a surplus.

    “He wanted to be able to sell that as being really good and he was this great economic manager.”

    But like household debt, a national deficit can be good if used to invest in the future, Jericho argued.

    “What if that deficit was used to build a hospital?

    “Our children, and our children’s children, are going to be using that hospital — would you prefer they didn’t build it?

    It’s not just about expenditure, he said, because budgets also reflect a government’s priorities in how it raises revenue.

    “Let’s say we raised $5 billion more from the Petroleum Resources Rent Tax — that means we could reduce the tax on individuals by $5 billion with no change in the budget balance.

    “Or we could spend that money on health or education.

    “Budgets are very much about choices.”

    Dollars & Sense is available on Spotify, Apple Podcasts, Google Podcasts or wherever you get your podcasts.


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    Commonwealth Budget 2025-2026: Our analysis

    by Fiona Macdonald

    The Centre for Future Work’s research team has analysed the Commonwealth Government’s budget, focusing on key areas for workers, working lives, and labour markets. As expected with a Federal election looming, the budget is not a horror one of austerity. However, the 2025-2026 budget is characterised by the absence of any significant initiatives. There is

    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages